AutoBeta(AutoBeta.net)07/23 Report--

As profits have fallen sharply to losses, Daimler, the parent company of Mercedes-Benz, is considering expanding layoffs and further cutting costs. According to German media reports, Daimler will cut 30,000 jobs and is considering closing some overseas factories.

According to German media, the cost-cutting plan launched by Daimler last year is more extensive than when it was first launched. People close to the plan said that it was widely spread within Daimler that the company would cut as many as 30,000 jobs worldwide, including many management positions.

In November 2019, Daimler announced that it would cut at least 10, 000 jobs worldwide, cut staff costs by about 1.4 billion euros, and cut 10 per cent of global management positions by the end of 2022. In June, foreign media reported that Daimler plans to cut another 10,000 jobs by the end of 2025.

With the outbreak of COVID-19, the performance fell sharply, and Daimler's cost-cutting plan was further upgraded.

German media reported that Daimler's layoffs focused on management. According to internal plans, about 30 per cent of managers in Daimler's European truck business alone will be laid off and nearly 17000 ordinary employees will be laid off. Layoffs are seen by Daimler as an important measure to reduce fixed costs by 22 per cent. Layoff notices will be sent to employees in July and August. In other areas of Daimler's business, 30 per cent of management positions will also be laid off.

The closure of some overseas factories is also under consideration by Daimler. According to the report, OlaK ä llenius, CEO of Daimler, is also considering closing the plant, the joint venture plant between Daimler and Nissan in Mexico, and Daimler's plants in Brazil and South Africa may be closed. In addition, capacity reductions in German axle, engine and gearbox factories are also under consideration.

The deterioration of performance is an important reason for Daimler's layoffs and factory closures.

According to Daimler's 2019 results, Daimler's annual revenue was 172.7 billion euros, up 3% from a year earlier, another record high, but its net profit fell to 2.7 billion euros from 7.6 billion euros in the previous year, a year-on-year decline of 64.5%. This also made it the biggest decline in nearly a decade, with net profit belonging to shareholders of 2.4 billion euros.

Daimler's operating income fell 6 per cent to 37.2 billion euros in the first quarter of 2020, while earnings before interest and tax plunged 78 per cent year-on-year to 617 million euros.

Daimler posted a loss of 1.91 billion euros (15.5 billion yuan) in the second quarter. Daimler said it needed to continue its cost-cutting program for the rest of the year.

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